Here's what some Alberta business owners think about the new federal wage subsidy

Some businesses in Alberta that have been declared non-essential and forced to close their doors are also feeling shut out of a federal wage subsidy program aimed at helping those that are still operating and struggling to stay afloat.

On Monday, Prime Minister Justin Trudeau announced details of a wage subsidy of up to 75 per cent for businesses and non-profit organizations that have seen revenues drop by at least 30 per cent due to COVID-19. Businesses are expected to top up employee wages for the remaining 25 per cent.

But the program offers no solace to businesses that aren’t operating.

“Wage subsidies don’t really matter to businesses that are closed,” said Jonathan Jacobs, who owns Fort Lanes bowling alley in Fort Saskatchewan.

“I don’t have any hours to give people or revenue to pay the other 25 per cent of their wages. That is really only good for businesses that are operating.”

Jonathan Jacobs, owner of Fort Lanes and director with the Fort Saskatchewan Chamber of Commerce, says the federal wage subsidy won’t help his closed business. (Submitted by Jonathan Jacobs)

The subsidy, which covers up to 75 per cent on the first $58,700 of an employee’s salary, could mean payments of up to $847 a week. The program is retroactive to March 15.

All businesses, big or small, will be eligible for the wage subsidy that will provide aid for up to three months.

On Friday, Alberta Premier Jason Kenney declared a long list of businesses, from clothing stores to hair salons, as non-essential, ordering them to shut down. 

Faith Grant has had to temporarily close down the three health centres that she co-owns.

“I’m still feeling the punch in the stomach. I have three operating businesses and now have zero, no jobs and no E.I. [for myself and my husband],” she said.

Business owners like Shaan Chahal, co-owner of Edmonton clothing store Sonia’s Runway, said the federal wage subsidy is, at best, only a short-term fix.

“It’s not nailing the problems, like if the losses we’ve incurred in the past month will be recovered, how the losses when we’re closed will be covered and going forward,” she said. 

One financial expert notes that finding solutions for businesses during these extraordinary times isn’t easy.

“Trying to find a simple solution to something like COVID-19 for small business owners is complicated. Finding a simple solution may look simple but it gets caught in something later,” said Susan St Amand, founder and president of Ottawa’s Sirius Financial Services.

Who does the wage subsidy benefit?

Specifics on how and when businesses will get the money are expected to be announced Tuesday.

For many companies, a wage subsidy of up to 75 per cent is a substantial relief, according to the Canadian Federation of Independent Business.

“We do realize that the wage subsidy doesn’t help everyone,” said Annie Dormuth, Alberta provincial affairs director with CFIB. “We definitely believe that it does help those that are able to operate.” 

Yvonne Dunn, general manager of Pinnacle Distribution in Lloydminster, Alta., is grateful that she will be able to apply for support.

The janitorial sanitation supplier was inundated with requests for products like toilet paper, hand sanitizer and cleaning products in early March.

Prime Minister Justin Trudeau has announced that businesses and non-profit organizations seeing a drop of at least 30 per cent in revenue due to COVID-19 will qualify for the government’s 75 per cent wage subsidy program. 1:54

Now that the business has run out of those items, the wage subsidy will help Pinnacle Distribution weather the next few months when business is slow, Dunn said. 

“This will help us. It’s still going to hurt, but this will help us,” she said. 

Amy Laing, director and president of beauty salon Ponytails and Horseshoes, is remaining optimistic that her closed business might still receive the wage subsidy. 

“We can make it through this,” she said.

Further supports 

Provincial and federal governments have offered other financial support for small and medium-sized businesses. 

On Friday, the federal government announced the new Canada Emergency Business Account (CEBA), a program that will offer small businesses interest-free loans of up to $40,000.

Alberta’s provincial government has also announced some measures including utility bill deferrals for up to three months. 

For Chahal, many of the measures offered by the province or Ottawa means taking on more debt that her small business can’t handle.

“Deferral is not the answer. Deferral means we have to pay later. They need to cut our rent or waive our rent. They can’t not help us,” she said.

“I think governments are having a hard time grasping what is happening with small businesses.”

Deferral is not the answer– Shaan Chahal, co-owner of Sonia’s Runway

A CFIB survey of 9,364 members conducted last weekend found a quarter of surveyed owners can’t pay their rent or commercial lease payments because of COVID-19 business interruptions.

CFIB is asking the provincial government to help those struggling to pay their bills.

“Now is the time for provincial and federal governments to step up and provide more relief with regards to fixed costs, in particular rent and leases,” said Dormuth. 

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